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Managing the points and miles earning credit cards in your wallet is a crucial component of maximizing rewards travel. It requires a careful assessment of each card to ascertain if the benefits and points earned outweigh the annual fee, and determining if the card lines up with your current travel goals.

Reasons to Downgrade or Cancel a Credit Card

There is any number of reasons you might want to downgrade or cancel a credit card. These can include:

A shift in your rewards strategy i.e. focusing on a different loyalty program to achieve a specific travel goal.

Changes to a rewards program attached to the card where it no longer aligns with your rewards strategy, for example, the loss of a transfer partner.

A reduction of bonus categories, benefits, or the points earning power of the card.

A change in personal circumstances such as a new job or welcoming a new addition to the family.

The fee outweighs the value you're receiving from the card benefits.

Moving to a new location which necessitates a change of preferred airline or hotel chain.

A new rewards card entering the market that aligns more closely with your travel goals and spending habits.

If you decide a card is no longer needed or has been made redundant due to new products entering the market, the next step is deciding whether to cancel the card or downgrade it to another product that doesn’t attract an annual fee.

Downgrade a Credit Card vs. Canceling a Credit Card

Deciding the fate of card's that don't make the cut can be a tricky business, as there are several ingredients to factor in.

You want to ensure that any points earned on the account don’t get wiped out from making the wrong call, that you can still use and transfer points and miles in a way that offers a decent return, and perhaps the most important, you need to consider how closing or downgrading the card will affect your credit score.

Before deciding to downgrade or cancel a credit card, it’s worth calling the credit provider to see if there are any promotions available on your card that might convince you to keep it. If the bonus provides enough value, it might make sense to hang onto it in the meantime.

If there are no promotions available, there are a few things to consider.

Can the card be downgraded? Some cards such as the Chase co-branded cards cannot be downgraded or converted to a card from any other loyalty program, or to an Ultimate Rewards-earning card. Additionally, charge cards cannot be downgraded/swapped to credit cards and vice versa, nor can you swap between personal and business credit cards.

How will it affect my credit score? Downgrading a credit card can ensure the age of your account sticks, and it also keeps the credit line open without any hard pulls, both factors play a role in your credit score.

Downgrading to a no-fee product may disqualify you from earning a new cardmember bonus. When downgrading from a premium card to a no annual fee card, you forgo any bonus you may otherwise receive if the card was considered a new product.

The Best Credit Card Downgrade Options

Downgrading American Express Cards

As of September 1, 2016, you will no longer receive a prorated fee from Amex cards when canceling outside of 30-days of the charge posting to your account. The same rule doesn’t apply to downgrading products. When upgrading or downgrading an Amex card, you still receive a prorated fee if within 30-days of the fee posting.

Downgrading Chase Cards

A lot of the cards offered by Chase are co-branded cards attached to hotel and airline loyalty programs like Southwest Rapid Rewards and IHG Rewards Club. The downside to these cards is you cannot downgrade or product change a co-branded card to one that earns Ultimate Rewards or even to a cash back card.

Although you can downgrade within a co-branded program if there is more than one card such as downgrading the United MileagePlus® Club Card to the United℠ Explorer Card. Just be aware that by downgrading, you will miss out on any signup bonus the card is running at that time.

The same goes for Chase branded cards, which can only be downgraded to another card from within the UR points earning family of cards.

If you intend to downgrade the Sapphire Preferred, an option without an annual fee is the Chase Freedom®. The card still earns Ultimate Rewards points with bonus categories that earn up to 5%, but you need to hold the Sapphire Reserve, Sapphire Preferred, Ink Plus, or the new Ink Preferred to transfer points to travel partners, or redeem points for more than a penny a piece in the Chase Travel Portal.

If you hold the Ink Plus, you can downgrade to the Ink Business Cash℠ Credit Card which is a fantastic small business credit card that charges $0 in annual fees.

Downgrading Citi Cards

Citi will not let you downgrade inside the initial 12 months of opening a credit card account, and they will charge at least part of the annual fee on the card if you are downgrading after the fee is applied.

There are a couple of options for downgrading Citi cards. The Citi® Double Cash Card is an easy to understand 2% cash-back card offering 1% on purchase and 1% when the statement is paid. A great card to downgrade to, as you do not miss out on any welcome bonuses.

Final Thoughts

There are many factors that need to be considered before you decide whether a card is ripe downgrading or should be canceled altogether.

We highly recommend talking to a rep to see if there are any promotions or bonuses available before heading down either path and also to explore downgrade options before making the decision to cancel a card as cancellations can sometimes have an adverse effect on your credit score.

If you have any questions, please don’t hesitate to reach out. We would love to hear from you and if there is anything we’ve missed, let us know in the comments!

For rates and fees of the cards mentioned in this post, please visit the following links: Business Green Rewards Card from American Express (Rates & Fees)

When Should I Downgrade a Credit Card?

4.5 (89.57%) 23 votes

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Will Citi let you downgrade their Premier to their Prefered without many issues? Never dealt with a card with annual fee and would just like to know I have the option to downgrade (or upgrade) depending on how life happens?

Yes, you can do that conversion and then consolidate points. As for the downside, when paired with the Sapphire Reserve I haven’t found one yet. I guess if you’re spending more than $25,000 at 5x earning categories you’ll lose a bit as the Ink Plus rewards you at 5x on up to $50,000/year, whereas the Ink Cash is only up to $25,000/year.

Howie, the Ink Cash isn’t one of Chase’s UR cards that’s being demoted to only 3x rewards instead of 5x? Or, are you saying we’d still earn 5x because we’re downgrading an existing acct from Ink Plus to Ink Cash?

Rick, the rumors being spread were only about new cardmembers — not existing ones and they have not been confirmed or denied at this point. So currently, a conversion would still get you 5x. This could of course change in the future.

Thank you so much for the advice! Question on Citi Double Cash cards – can you possess more than one Double Cash card at the same time (I already have one, but may want to downgrade one other Citi card)? Thanks!

Bill, I don’t personally know if you can — however, not sure why you’d want to do this. Perhaps look to convert to another product like the ThankYou Preferred? Are you looking to keep the account open from an aging perspective or just keep the line of credit available?

I’ve had the Amex Green since forever. I also have Amex Hilton, Everyday Preferred, and Platinum. I’m trying to figure out what to do with Green Card as the age is good for my credit score, but I don’t like the Membership Rewards earning rates. Should I upgrade Green to Gold? Does that mean I lose any chance of promo MR for Gold? Should I apply for Gold first to get Promo MR and then deal with doing something with Green?

Frank, I’d call up Amex and tell them this exact story and ask what your options are for converting the card product. This is a perfect scenario for Amex to do the right thing. Upgrading in place would preclude you from a future bonus on that updated card.

This is good avise. Probably the most important yet not so highlighted tip is to _attempt_ to downgrade them. Most companies (and not just credit card) will prefer to offer a promotion rather than losing a customer. So once you investigated a little bit about the options (the next steps below), you have the tools to make the call with some arguments to negotiate!

I had the Delta gold Amex card and received 50,000 bonus miles for reaching a certain spending threshold within 3 months. After a year’s time I noticed that I was charged the annual fee. I was then able to cancel the card within the 30 day window and get a full refund. I was offered the option of signing up for the no-fee Amex EveryDay card and got another 10,000 miles after reaching an easy spending requirement. I hope my FICO score is not affected by cancelling and signing up for the new card, but I was able to get a total of 60,000 miles with no fee.

Interesting article. New to rewards cards & recently approved for CSR. Like the perks, but can see how the fee may become cumbersome if I don’t travel enough. Appreciate the recommendations for maintaining the UR points. Are there posts about how best to determine whether the fees or perks are paying off?

Frank, we provide some insight on how to look at the value, but you need to individually look at what you’re paying to see if it makes sense for your specific case. For example, if the only benefit you receive from a card is lounge access but you never use the lounge, it sounds like it is not paying off.

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